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Beppe Grillo: "The Eurozone Chess Game Enters Its Final Stage: Germany Wins In Three Moves"
With everyone's attention focused these days on Greece's Tsipras (and Varoufakis), and also casting concerned glances at Spain's Pablo Iglesias, head of the poll-leading Podemos party which may well be the next Syriza, many have forgotten that Italy has its own "anti-austerity" voice, that of Beppe Grillo, a voice which had been relatively quiet in the recent past. However, judging by his latest blog post, he too will want to be heard in the seaschange in Europe in the aftermath of the Syriza surge and the resultant chaos that has shaken the Eurozone to its core.
From Beppe Grillo's blog
The Euro’s up in smoke
The Eurozone chess game has entered its third and final stage. Germany wins in three moves - Euro, deflation and purchase of public debt by the ECB (QE) – and in the last few years it has found a way to maximise its profits and reduce to zero its risks as Europe’s creditor.
Germany’s risks
Let’s try analysing the problems of the Eurozone as they really are: problems of conflicting interests of creditors and debtors regulated by demand and supply. If you agree to make a loan to your neighbour, you open yourself up to three risks:
- that he’ll pay you back in a different currency that has perhaps been devalued unless you had a prior agreement about the repayment currency (currency risk);
- that with the amount you get back, you can buy fewer goods or property (inflation risk);
- that you don’t even have either of the first two problems because your neighbour simply goes bust and thus you lose everything (capital risk).
How Germany gains
Germany is the Eurozone’s only big creditor with about 600 billion Euro loaned to various countries, most of which are on the periphery of the Eurozone, including Italy. The Euro has given it this enviable status. If you produce lots and you consume and invest very little and you keep domestic wages and prices low, then you’ll always have cheap unconsumed goods to sell to your neighbours. And you might also be able to make money by providing credit that they will probably ask you for so that they can buy your goods that are so cheap and so good. This is Germany’s situation. It has always had this approach to the market economy in European affairs ever since 1870 with its roots in Calvinism. Thus to sell and lend to the countries on the periphery of Europe was always Germany’s preferred economic activity when everything was going well, before the crisis in 2008. Since then its only objective has been to get that credit returned and to protect its purchasing power.
...
Germany’s checkmate
Basically, QE will give Germany the time needed to achieve the final objective needed to get checkmate: to get rid of the national jurisdiction over as much of the debt as possible and thus to reduce its own capital risk as much as possible. Only the debt issued under Italian jurisdiction can be redefined in a new currency and thus could impose losses on foreign creditors, mainly German, via devaluation of the new currency. Today that proportion stands at about 93%. So only 7%, not more than 150 billion of public debt, cannot be redefined and has to be paid by in Euro, in accordance with the contract. Assuming that there’ll be devaluation of 30%, implies that the cost of a Euroexit for Italy in relation to its public debt, would have been no greater than about 50 billion euro before QE. With the de facto QE, this number has gone up to about 80 billion given that if there’s a collapse, the cost of a “haircut” of let’s say 30% on 100 billion government bonds (BTP) that would be bought by the Bank of Italy, would be a cost borne by all of us. In the eyes of a German creditor, restructuring our debt or an exit with the devaluation of the new currency, in fact present the same capital risk.
So, from now on, the only thing that counts for us Italians in the game of "creditor v debtor" is not to lose jurisdiction over our debt, so that we maintain the right to redefine it. This means we get the benefit if we do exit. Germany’s objective is exactly the opposite: remove our jurisdiction over our debt and thus increase the cost of an exit for us and give the advantage to them, thus continuing to protect the interests of the creditors, which is something it’s really good at.
If we wait too long before leaving the Euro, then Germany will get checkmate and after cashing in all the benefits of our entry into the Euro, it will also cash in on the benefits of our exit.
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Vee have vays ov making you pay.
Not on your nelly !!!
Wendell: It's a mess, ain't it, Sheriff?
Ed Tom Bell: If it ain't, it'll do till the mess gets here.
Sorry Ghordius but the EU is the civilian arm of NATO and once TTIP is in place the USA will dictate terms in both forums
IF... TTIP goes through... then yes. if not... then your excellent point would still be debatable
thank you for the reminder, btw. STOP TTIP: https://stop-ttip.org
collection of signatures will go on until October 2015. please have a look
Most seem to forget what was explained here on ZH a few days: A GREXIT or haircut for Greece will cause a few important European banks go belly up because they hold greek bonds as collateral.
Very fast the next steps will follow with Portugal, Spain and Italy demanding haircuts as well or PORTEXIT, SPEXIT and ITALEXIT. Immediately all European banks will shut the gates.
We are not talking about bookkeeping and balances here. We are talking about break down of infrastructure and survival.
It is still winter here and we need at least three months before we can harvest the first vegies from our backyard.
Please don't rush those exits and give us a few more weeks please.
yep, that's why the greeks will get their 6 months request - all they really want is a cut (small one at that) of the euro QE (non)money. Unlucky for (the people of) Portugal, Spain & Italy (lucky for Germany's elite) that the political parties in power in their countries are not the confrontational type
George Carlin says it all:
http://www.informationclearinghouse.info/article41001.htm
Full Retard Alert: Bob Pisani says on air to stop the emails; the Baltic Dry Index doesn't matter anymore.
Memo to Bob: Useful idiot is U.
It is worshiping black peepoe month.
Useful idiot BE U;)
http://www.brasschecktv.com/page/27895.html
UK had both foresight and lack of foresight...It kept itself in splendid isolation, foreseeing all the birth pains of the euro...but by doing so it effectively gave Germany sole hegemon status. France by iself has never been able to offset German influence and economic power...
So for the long run we will see whether keeping out of the Euro was such a good idea for UK. If EU becomes increasingly prussian as is likely, economic influence may quickly turn military (as we are starting to see in Ukraine).
Creation of EU created a huge real political power vacuumn...Germany is stepping in to fill it. Germans lack the anglo's level headedness unfortunately, or the french's cosmopolitanism.
Their history has always been all or nothing...Gott mit uns. Greeks and everyone else better start realizing this
The Panoply of Pusillanimous Predation:
Dick(head) Cheney: Deficits Don't Matter
GW Bush: Mission Accomplished
B Obama: Yes We Can
Cramer: Buy, buy, buy
Pisani: Baltic Dry Index doesn't matter
... and, coming soon to a theatre of the absurd near you...
Everyone on CNBC (in unison): Europe doesn't matter.
I follow Viktoria Nulland-Nudelmann-Kagan:
.
Fuck the EU.
Oh yeah. Finally figured it all out. Go Beppe. Forza Italia.
I stopped reading at "Final Stage". Haven't we seen the final stage every six months for years now?
If I'm reading this correctly, Mr. Grillo doesn't even consider the possibility of walking away from the Euro and defaulting.
These currencies are fiat. Abstract. Nothing, in the real world. A shared hallucination, if you will. Now that's very powerful of course, because a lot of other things depend on, and are defined by, that shared concept of reality. But that doesn't make them real. Italy, or Greece, or Spain, or anybody, could walk away and say "I'm no longer taking part in this shared hallucination." It would be hard and cause a lot of other things to collapse. But it is possible. Iceland did this in part.
Is the fear that the USA and Germany are going to invade Italy? Because when all other considerations are dealt with, that's what remains. You say I have to pay you in currency that you control, whether or not it utterly impoverishes me? And then I say "No, I'm not going to do that, and I'm aware of the consequences," what's left for you to do? Punch me in the nose, more or less.
The only loser here are the Greek citizens.
Austerity for years
Depression for the next 2, regardless if they stay or leave.
Revolution in year 3?
Very good. Somebody that gets it.
There is no solution without pain. No matter what choice is made, the serfs will pay and the oligarchs of both nations will be fine. Even after depression and revolution, the oligarchs are still there.
And don't get me wrong, I am not against wealth. That is class warfare. If a person is able to attain massive wealth legally, then so be it. But it is the government and their collusion with banks and other industries, IMO, that do things in a non efficient or corrupt way. Greece should never gone into massive debt. But government allowed it and banks obliged. Pretty much the same story world wide.
Perhaps Dr. Oz can have a show that proves Greek olives will add ten years to ones life!
Why doesn't Germany simply leave the EU? They could also leave NATO, but come to think of it they are NATO.
Me bad, I forgot they are still "Owned".
None of it matters.......markets heading towards green for the day/week/month/year! It's all good!!
Germany to Greece: I want to see you strip.
http://youtu.be/buoFAAnKWl4
Why this continued drum beat of Germany’s desires, Germany’s power, Germany’s strategy when it isn’t Germany at all. It’s always been the banks, the cartel, the financiers, the blackmailers, the pressure makers. Was it Germany that designed and implemented an impossible euro contract for Greece, who drew them into a trap like the spider beckons the fly?
No. The EU was the bankers’ idea to lull the people of Europe into a “common market” but which instantly became a political unit with iron-fist control from Brussels and unelected officials calling the shots.
Deutsche Bank is not Germany; it’s Wall Street. It’s Goldman Sachs. If it were the German people, they would be prosperous. Instead, it’s easy to see where the prosperity is accumulating. It’s high fives and bonuses all around, from the European big banks to London to New York.
Remember this from April 10, 2013, Europe’s Poorest? Look North: ECB Survey Puts Southerners on Top in Household Wealth, Germans Near Bottom :
FRANKFURT—German households are among the poorest…in the euro zone, according to a study by the European Central Bank that adds a new twist to the debate over how far taxpayers in Northern Europe should go to support weaker countries…
The median, or midpoint, of German households had just over €50,000 in wealth, the lowest in the euro zone. The median in Greece, was twice that, at €102,000, and five times as high as in Cyprus at nearly €270,000.
http://online.wsj.com/article/SB10001424127887323820304578412540882466844.html?mod=WSJ_hps_LEFTTopStories
Deutsche Bank= Red Shield
Not for the first time JR you have hit the nail on the head.....in this case multiple nails. The meme of bloated Germans diving their poor European neighbors to poverty is just propaganda. The bankers are totally transnational with loyalty to no country.
Beppy Bro you gots to be BTFD and don't worry your silly head over what the Germans do. They are going to get ass whipped again when the NWO falls and nobody is going to pay anything back to them ever. Long live the revolution. Go long Russia.
Off topic....
I can't believe I just saw this! Read and be very alarmed! Basically U.S. citizens are a bigger threat than ISIS...
http://www.cnn.com/2015/02/19/politics/terror-threat-homeland-security/index.html
The final act of the play is nearing. Notice more and more how the word terrorist is being replaced by the word extremism. BIG FUCKING DIFFERENCE!!
“The global financial system desperately needs a big, bloody sovereign default—-a profoundly disruptive financial event capable of shattering the current rotten regime of bank bailouts and central bank financial repression. Needless to say, Greece is just the ticket: A default on its crushing debt and exit from the Euro would stick a fork in it like no other.
“But don’t count on the Greeks.” – David Stockman
http://www.lewrockwell.com/2015/02/david-stockman/beware-of-greeks-not-bearing-gifts/
Reading like an epitaph of "America" in the final death throes and the Americans that made it possible -
"The US is nothing more than nouveaux riche fecklessly squandering away the windfall."...
Simply brilliant!!!
+1, Son of Nemo. And, as commenter nobodysaysBOO says:
“Our guys are the Crooks.”
What? You mean loans have conditions that the borrower must meet????
Ach! Mein Gott!
Bepe,
Your news flash is at least 2,400 years late.
"The rich rules over the poor, and the borrower is servant to the lender." Proverbs 22:7
They can reduce their risk for loans in the Eurozone, but they can't make you borrow and spend rather than produce and save.
It's not enough to leave the party. The Greeks have to burn down the house.
There is no more Germany, only German taxpayers, and historically speaking they dont have a learning curve (Germans), a learning curve would mean at some point in time in the past or future.....they were wrong.
damned
Grillo is a buffon and his followers are retarded. They literally cannot understand even simple economics. But that fits the picture: he appeals to low-educated crisis-scorched folks, who just need an enemy to deploy their frustration on. The story of an external enemy always works: it did in the 30s, it kinda does now. So, if your aim is to win election or if you're a retarded dumbfuck, go ahead, bash the euro. If you instead care about giving your nation's finance long term sustainability, then you know work has to start at home...